Zynga has turned its ambitions to online real-money gambling as its stock prices have slumped to a near-all time low today amid doubt about its profitability with existing social games. But its latest hire, first noticed by Social Casino Intelligence, indicates that Zynga is in fact full steam ahead with its plans for real-money gambling.
In a smart move, Zynga has managed to snag Maytal Ginzburg, former Senior Vice President of Regulated and Corporate Markets for 888 Holdings, as its new real-money gambling chief.
If you’re not familiar with 888 Holdings, the company is among the largest online gambling holding companies in the world, and is responsible for its 888-branded games including 888 Sport, 888 Bingo, 888 Poker, 888 Casino, and platforms that were released earlier in 888’s existence including Casino-On-Net and Pacific Poker.
Zynga has been plagued by turnarounds as its stock has dropped into dangerous territory. Yesterday, an anonymous source told Bloomberg that Bill Mooney, vice president of studios and general manager of Farmville, and Brian Birtwistle, Zynga’s vice president of marketing, had resigned. These departures have been just among the steady stream of executives and other employees heading for higher ground.
Zynga’s Hail Mary is the reported real-money gambling site Zynga Poker, which launches in early 2013 for users in the United Kingdom. Zynga Poker will be competing for the U.K. market with other sharks in a tank chock full of online gambling veterans, which include bwin, Poker Stars, PartyGaming, and of course 888. It’s treacherous waters for a neophyte like Zynga to navigate, but Ginzburg’s confidence in the social and design qualities of social gaming could influence Zynga to take a different route and target a different demographic of real-money players altogether.
The majority of poker sites that exist today seek to attract a higher caliber of players, and offer more competitive and interesting styles of game play for experienced players. Such sites typically sport its roster of endorsements by top professional gamblers, thereby attracting the serious online gamblers. Zynga, with Ginzburg’s direction, will likely target the casual poker players, who would rather be playing for the experience than to make a quick buck.
“We want to attract players who will play for casual entertainment, and we therefore needed to deliver social platforms that are easy to use yet provide all the interactive features users expect,” Ginzburg told Inside Poker Business.
The details surrounding Zynga’s real-money gambling platform have been sparse, but we do know the cost of launching such a venture are significant. In Nevada, one of the few places in the U.S. that allows online gambling, companies must pay between $1 million and $1.3 million for an online gambling license, according to a source close to Digital Trends. Overseas, the licenses alone could be anywhere between $500,000 and over $1 million depending on the jurisdiction.
Building out a gambling platform from the ground up is a labor-intensive and costly process. Not surprisingly, the social gaming giant has been shopping around for partners with existing real-money gambling platforms. But then navigating the minefield of licenses, partnerships, and regulations is a task that, without Ginzburg, would likely be over Zynga’s heads.